When times are slow they allow for musings.
I think the phrase, 'the market is always right,' is quite misleading and overused, a cliché if you like.
But I will add in it's defence that newbies should take it at face value. I'm reminded of this when I read another thread today where the stock had made a great announcement and the price was going down. "But why is the price going down," asked one investor with a few hundred posts to his name. You get the picture.
Everyone needs to be able to answer that type of question comfortably before they can then challenge our cliché. But importantly, when a trade turns against us, it's worth recalling, at least to bring us some solace in that we don't always know what she will do.
However, if we say that the price today is right, then what do we say about tomorrows different price? Is it right too? If it is, then yesterday's price must have been wrong. But no, we counter this by establishing that the price of the market at anytime is what it is, and it is the correct one. So would say many.
But to me, this reduces the market price to an uninspiring common denominator, like saying the weather is what it is, and never allowing for the fact that the forecasts are often wrong. If I never used my own initiative by taking an umbrella in early Spring when the morning sun is shining, I just may end up getting rained on.
A case in point. CVN has peaked in astronomical strides, yet tripped over as if she's stumbling in the dark. But what a poor simile I use, as few, including me, believe she's foundering. We're are buying her back, or averaging up or down, whatever it is that supports her, as we know she deserves it.
The market is more than just today's price, but the entirety of all possibilities yet to be realized. We know that she is driven by human sentiment, as trading in the first instance is a uniquely human enterprise that many so often forget, thinking that it is determined by absolutes of facts and figures, like the newbie on the other thread who was expecting the great news of the case to drive the price up, whereas sentiment was saying, sell, sell, sell. And those well in the game have stronger and stranger sentiment than most of us.
As a human activity the market is very unpredictable. Consider money and any of the relevant virtues or vices. Mostly the latter are more appropriate. When it comes to managing money and how it drives our emotions, I am content to drive a Kingswood, but drool over the Merc in the neighbours driveway.
Anyway, the market is what it is, very often an irrational mess of human activity, but not without the need to strive to master, even if she often conquers us. But there lies the clue in unravelling the mystery. How is it that I interact with this bitch that will eat me alive?
Sleep with a knife under the pillow I say, that is, have all the security measures in place at all times, for you never know just when she'll bite. But that is just half the game. We can't just rely on fall-back measures.
When you begin thinking about the other half, then you know you are on your way to managing her.
As for the market and CVN, it is at times likes these to recall that sentiment is immediate, like a spoiled kid who reacts to the first impulse. Provide some proper discipline and in time she'll respond appropriately.
For me, this means buying more and making her feel like she's loved, like all mistresses require. You see, she really is the master, or so I try to make her think.
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